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By Prince Golez, Manila Reporter
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Thursday, February 2, 2017
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MANILA – The Department of Finance (DOF) has retained the tax exemption of workers’ 13th month pay and other bonuses in the proposed tax reform plan.
The DOF earlier agreed to keep the value-added tax (VAT) exemption for senior citizens and persons with disabilities.
During the Senate ways and means panel, Sen. Juan Edgardo Angara, committee chair, on Tuesday welcomed the retention of VAT exemptions.
“We seek to build on this as we work hand-in-hand in coming up with the much-needed tax reform that will extend the most relief to our people, while balancing it with the government’s ambitious vision of jumpstarting our country’s economic growth,” Angara said.
Signed into law in 2015, Republic Act 10653 increased the tax-exempt cap to P82,000 from P30,000 for Christmas bonuses and other incentives.
The finance department initially proposed to remove the tax exemption of bonuses and to exempt from income tax those earning P250,000 and below a year.
Angara said under the revised proposal, those who earn P332,000 will be tax exempt.
According to him, nearly 5 million or 83 percent of taxpayers will be exempted from income tax. About 2 million minimum wage earners are currently exempted from tax.
The “ultra rich,” comprising 0.1 percent of taxpayers, will pay taxes income taxes at a rate of 35 percent, he added.
“This signifies that our government is listening to our calls and the sentiments of the people, and is open to compromise,” the senator ended./PN
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